Breaking

Monday, March 18, 2019

Capital spending at 29pc in first eight months

The government’s capital expenditure in the first eight months of the current fiscal year 2018-19 has remained at 28.89 per cent of the total allocation.

The government had allocated Rs 313 billion under capital expenditure for this fiscal year.

However, low capital spending of the government reflects the failure of the government to boost capital formation programmes and tepid progress of development projects in the current fiscal year.

Addressing the meeting of the Finance Committee of the Legislature-Parliament today, Finance Secretary Rajan Khanal, acknowledged that budget spending has not been as expected in the current fiscal though the spending has improved if compared to expenditures in the previous fiscal years.

“As the country is in the first year of implementing fiscal federalism, the government had to prioritise formulating necessary laws and dedicate more time to it. Government spending will improve in coming years,” said Khanal.

As a result of the government’s failure to ramp up spending, the Ministry of Finance had revised downwards the capital budget for this fiscal year to Rs 265.2 billion, 15.5 per cent down from the previous allocated capital budget of Rs 313 billion through the midterm review report of the budget for fiscal year 2018-19.

Similarly, the government had also revised down the budget on recurrent expenditure by 5.57 per cent to Rs 798.4 billion. The 2018-19 budget had allocated Rs 845.5 billion for recurrent expenditure. Likewise, the government had also revised down the budget on financing by 13 per cent to Rs 135.4 billion for the current fiscal, against Rs 155.7 billion allocated under this heading by the budget for fiscal 2018-19.

However, Khanal said that the government has targeted 80 per cent capital expenditure of the total allocation till the end of this fiscal year. Similarly, the government expects 92 per cent recurrent expenditure till mid-July.

Meanwhile, lawmakers at the meeting asked the government to allocate budget to projects only after proper analysis and study of the projects. Similarly, they also stressed on the need to improve budget disbursement mechanism of the government for development projects.

Krishna Prasad Dahal, chairman of the Finance Committee, said that the government should boost budget spending and improve budget disbursement by addressing existing policy hurdles.